Income Tax Act 2007 section 257MS

Excluded activity: subsidised generation or export of electricity

Section 257MS defines when the generation or export of electricity counts as an excluded activity for social investment tax relief purposes, specifically where that activity benefits from government subsidies for small-scale low-carbon electricity generation.

• Generating or exporting electricity is an excluded activity if anyone involved receives a feed-in tariff under a UK government scheme designed to encourage small-scale low-carbon electricity generation.
• The exclusion also applies where a financial incentive is received under a similar scheme operated by an overseas government.
• It does not matter whether the feed-in tariff or incentive is received by the enterprise generating or exporting the electricity, or by some other person — the exclusion applies regardless.
• This provision supplements the broader list of excluded activities and ensures that subsidised electricity generation cannot qualify for social investment tax relief.